Elective procedures can balloon your medical expenses in any given year, especially if you find out they aren't covered by your insurance plan. However, Uncle Sam might be willing to help with the costs. Depending on why you chose to have the nose job or another elective procedure, you might be able to use it to reduce your income taxes.
Elective procedures can be deducted as a medical expense if they meet the IRS requirements. To be deductible, medical expenses include "diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body." For example, if you elect to undergo extra diagnostic tests, those tests would qualify as medical expenses for diagnosis. Similarly, if you undergo elective surgery to correct your vision, that would be deductible because the surgery is a treatment of an eye defect.
No Cosmetic Procedures
Elective procedures done for cosmetic reasons won't be deductible on your taxes. Cosmetic procedures are those designed to improve your appearance, rather than to improve the functioning of your body. For example, getting a facelift to get rid of wrinkles or a hair transplant because you're starting to go bald won't get you a tax break. However, you can deduct the cost of cosmetic procedures when it fixes a deformity that results from either a genetic condition, a personal injury you received in an accident or during the treatment of a disease.
Only your total medical expenses above a specified percentage of your adjusted gross income are deductible. For 2012, the threshold is 7.5 percent, but starting in 2013, the limit increases to 10 percent. When you figure your deduction, include all your qualifying medical expenses, not just your elective procedure costs. For example, if you have an AGI of $78,000, in 2012 only your medical expenses exceeding $5,850 would be deductible. In 2013 when the 10 percent threshold kicks in, only your expenses exceeding $7,800 would be deductible.
Paying for Others
Your medical expenses deduction isn't limited to just your elective procedures. Instead, you can include the medical expenses of your spouse and dependents as well. For example, if you are married and both you and your spouse are considering getting corrective eye surgery, consider getting it in the same year so that you'll have a better chance of exceeding the AGI threshold and being able to deduct some of your expenses.